Saturday, February 22, 2014

Empires have fallen when people agitated and
agitations have taken places for marketplace issues !

During Oct 2013, it was ‘Allium
cepa’ – the bulb onion that was embattling the Central Govt ~ onion prices, defying the sharp dip in the
rates in the country's biggest wholesale market at Lasalgaon in Nashik,
continued to spiral and touched the Rs 100 per kg mark - making the Govt
panick-stricken. Food minister K V Thomas rushed to Maharashtra
as the Congress-ruled state accounts for 28% of the total onion production to try and crack down on hoarders. Commerce
minister Anand Sharma blamed hoarders for the spike in onion prices which
political rivals painted as the UPA government's failure, and worse,
insensitivity towards the poor. The Congress government in Delhi, which rode the onion anger to power in
1998, was keen to shift the blame on its
political opponents. Political
statements flew with some suggesting that exports be banned as well. Even as they blamed the farmers for keeping
the stock, it was public knowledge that it is the middlemen who control the
market.

A casual online check today [21.2.2014] shows
Onions Big @ Rs.9 per kg and Small Onions at Rs.25 per kg….. not sure how much
they cost in local market. Onion prices cooling off as much as 300 per cent in January helped India's
wholesale price-based inflation ease to an eight-month low, recent government data reveals. Onion
inflation has fallen to a little over 6 per cent in January after touching 336
per cent in September last year and is at a near one-and-a-half year low. The
wholesale price index (WPI), long regarded as India's main inflation measure,
rose 5.05 per cent last month, compared to a rise of 6.16 per cent in December.
However, core WPI inflation inched up to
3 per cent last month, which analysts said was its highest level since April
2013, which is likely to have Reserve bank of India (RBI) Governor Raghuram
Rajan worried.

Meantime newspaper reports suggest that the minimum export
price for onion may be slashed by another $10-15 a tonne.
This reportedly is a fallout of the falling onion prices in the
wholesale markets of Maharashtra. While the
ministry of agriculture had suggested for complete removal of the MEP to
facilitate easy exports, department of
consumer affairs have strongly opposed it stating that it will not only
push up prices in the domestic market
but it may lead to unfair trade practices. According to consumer
affairs, one of the reasons for the abnormal hike in onion prices some time
back was uneven distribution in the domestic market. Reports from states
suggested that there has been large scale hoarding to export rather than
supplying in the domestic market as
exports were profitable, said an
official source. Currently, the
wholesale onion prices in Maharashtra
are between Rs 8 a kg to Rs 10 while the retail prices are in the range of Rs
20 a kg to Rs 25.

Bangladesh is one of the prime buyers of
Indian onions. Although Pakistan,
Iran and Egypt are competing with India, the
exports have increased substantially after the reduction in the minimum export
price (MEP) to $150 a tonne. If one
could recall there was the Onion crisis in 2010 caused by errant rainfall in
the onion producing regions which led to a shortage of onion production. The
crisis caused political tension in the country and was described as "a
grave concern" by Prime Minister Manmohan Singh.

Naturally so as onions are considered an indispensable
ingredient of most Indian cooking, providing the pungent foundation for a
thousand different curries and other dishes. That time, wary of historical
precedent, Prime Minister Manmohan Singh and his government responded
forcefully by banning onion exports, lowering import taxes and by getting in
shipments of onions from neighbouring Pakistan. The opposition parties blamed the crisis on
policy decision on exports and imports of the ruling Congress. The shoppers at various markets agree that
Indian onions are the world’s tastiest but are fed up with price swings.

To conclude, here is something excerpted from an
interesting report in India Today in Jan 2014…….. The Supreme Court doesn't just have to deal
with complicated Constitutional issues, major scams and other important cases;
novelty is the spice of every day in the life of the apex court. But it doesn't
just grin and bear with everything. On Friday, it sternly declined to entertain
a Public Interest Litigation (PIL) seeking direction to the government to
regulate the prices of onions and other vegetables. To add light banter
to the buncombe, a bench headed by Justice BS Chauhan told the petitioner
staccato, "Stop eating onions, prices will come down." On a more
serious note, the court told the petitioner that it should not be burdened with
such public interest suits.

Union Law Minister Kapil Sibal had blamed the high prices
of onions on BJP's PM candidate and Gujarat Chief Minister Narendra Modi. Sibal
said people suffered a shortage of onions as the Modi government had handed
over huge tracts of land in Kutch, which
accounts for a big part of the onion crop, to the Adani Group. The truth was found to be otherwise. In Gujarat,
onions are grown in Saurashtra, not Kutch, and
the land given to the Adani Group is arid where nothing is grown.